Jobs in Africa

The African Economic Outlook (here) came out this month. It predicts continued 5% growth overall, with about 7% in the west and only 3-4% in the north and south. For Nigeria, and my former students should pay attention, it points out that most of that growth is NOT in the oil sectors: agriculture, trade, and ICT growing fastest. It also advises countries to invest more in the value added industries. Given that the vast majority of my intro economics students and even the people on the street in Nigeria not only could but did tell me the same thing on multiple occasions, I'm less impressed. It's a right answer, of course, but more needs to be done to identify why it isn't happening when everyone already knows it's the right answer and to take the political economy more seriously.

Oh, and as an aside, take a look at this graph from the AEO:

I could be wrong, but I don't think that's how gears work. The bottom two would turn just fine, but the Human Rights gear is pushing the Unequal Access gear counter-clockwise while the Exclusion gear is pushing it clockwise. From a graph standpoint, this undermines the presumed point that each of them exacerbates the others. It suggests maybe that a poor human rights record makes unequal access not as bad, or that unequal access improves human rights...

Teal argues that the increase in education supply in Africa is a good thing, but only provisionally. The question is: why is more education good? It's good from a human rights/development perspective, clearly. But whether increased education will bring people out of poverty depends in part on whether or not there are jobs available that demand the increased skills.

"Without the factories the dramatic increase in the primary educated work force will indeed see little economic gain from their education. The recent increases in the demand for education beyond the primary level certainly suggests that both students, and their parents, are aware that low levels of education have little value in the job market place. Focusing on meeting that demand rather than focusing on why that demand has arisen may well be to miss the critical problem facing educational policy in Africa."

One of the informal jobs I saw often in Nigeria is that of the porter. People, usually boys, wandered the Jimeta market with wheelbarrows, offering to carry my purchases. The Sudanese government, however, has decided that it is in the public's interest to create a monopoly on wheelbarrows in Khartoum. Porters are not allowed to own their own wheelbarrow, but must rent them at high fees, ruining what little income they were getting from a pretty thankless job.

El Alaoui, Aicha, Elhadj Ezzahid, and Jallal Eladnani (2013). "Estimating NAIRU: The Moroccan Case", MPRA Paper No 56815.
In intermediate macro we are introduced to the Non-Accelerating Inflation Rate of Unemployment (NAIRU). The idea is that if the level of unemployment is lower than NAIRU, you can expect inflation to increase, and to decrease if unemployment is higher. They estimate that the NAIRU has decreased from around 13% in 1998 to about 9% today. There is no explanation for why this happened and the policy conclusion - Morocco needs looser monetary policy based on the fact that the unemployment rate was consistently higher than NAIRU - does not capitalize on the fact that inflation has been remarkably low and sometimes negative since late 2009 or discuss the bank's mandate, goals, or governance.

Fact checking Common Core: Fair and Balanced

A friend pointed out an article on the Obama administration's current set of Common Core (CC) standards in education. The article, by Burke of the Heritage Foundation appearing on Fox News, casts the standards in a fully distopian light, closing with the beautiful zinger:

But if states stay on the Common Core bandwagon, say goodbye to “1984,” “Animal Farm” and “Brave New World.” No need for kids to be reading those books, anyway. They’ll be living them.

Burke's primary concern is that for most of students' learning experiences, fully half of what they read is supposed to come from so-called "informational texts," which she typifies with the following list:

The Federal Reserve Bank’s “FedViews,” “The Evolution of the Grocery Bag,” and “Health Care Costs in McAllen, Texas.” And, roll over “For Whom the Bell Tolls” it’s time to make way for that GSA classic: “Executive Order 13423: Strengthening Federal Environmental, Energy, and Transportation Management.”

Notably missing from the CC are many of the greatest authors of all time:

Jane Austen, Charles Dickens, J.D. Salinger, Washington Irving, Edith Wharton, James Joyce, Sinclair Lewis – all achieved that complex goal. And all are absent from the Common Core list

From her article, I was quite sympathetic to her concluding line. It turns out, however, there is an important element she missed from reading the standards themselves and their intents, and I was relieved to see that these nuggets are not representative of the writing students are expected to have mastered. (However, I was much less reassured by the CC explanation that teachers were to be free to use whatever methods they wanted, as long as Big Brother gets to control the messages.

Analogy of the Day: MBAs and EAWs

I have read these bits of advice over and over again for development types - expat aid workers, academics, and all the rest. Maybe we should remind ourselves of the kind of company we're keeping the longer we keep these bad habits up:

Top 5 problem-solving mistakes by MBA's

• “Avoid jargon” ...  

•  “What about the organizational design?” ... A lot of papers identified a bad decision, and then suggested reversing it. But they neglected to address the issue of why the bad decision was made, and how to make sure the same mistakes wouldn’t be made in the future. 

• “Don’t define the problem as the lack of your solution.” For example, if the problem is “the lack of centralized purchasing,” then you are locked into a solution of “centralized purchasing.” Instead, define the problem as “high acquisition cost” and then examine “centralized purchasing” vs. “decentralized purchasing” (or some other alternative) as two solutions to the problem. 

• “What is the trade-off?” Every solution has costs as well as benefits. ...

• “Which language is this?” I write this when I get gobbledygook written in the passive voice with big words that don't mean anything. ... 

(HT: Newmark)

Create Value, Not Jobs? How about AND?

Gurri makes a very good point (HT: Cafe Hayek), but one that wouldn't be immediately embraced by people the way it is regularly framed. (It's also not the only good point to be made on the subject, either, but that's another day's lecture.) The issue not "Create value. Not jobs." It is to create jobs of value. It is to enable people to create value and jobs will follow, sustainably. Partly this is semantics, but I think the semantics are important in terms of effecting policy.

It's easy enough to create make-work jobs. Keynes opted for digging holes and filling them up again. Germany (and many others) have expensive humans repave roads poorly that machines could do much better, much faster, and less expensively. While I do believe in the principal of having someone work for what they gain to avoid idleness and the evils of a dole, it ought to be work that makes at least one other person's life better off.

Slightly more tricky is creating make-work jobs that produce something more. India has a number of good programs that create jobs that also produce something of value, for instance.

The Lighter Side of ... Studying

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